One of the big losers from yesterday’s successful election in Honduras has been Brazil’s president Luiz Inácio Lula da Silva, who demonstrated that under his presidency, Brazil is not ready to play a positive leadership role in the hemisphere.

Not only did Lula seem to be complicit in smuggling deposed Honduran president Manuel Zelaya into the Brazilian Embassy in Tegucigalpa—an irresponsible move that risked the possibility of major confrontations and bloodshed in that country—but he stubbornly refuses to recognize yesterday’s election as legitimate.

Lula’s grandstanding has nothing to do with a supposed commitment to democracy, of course. After all he continues to lavish praise on the Castro brothers’ dictatorship in Cuba, has said that Hugo Chávez is the best president Venezuela has had “in one hundred years” and was one of the first world leaders in congratulating Mahmoud Ahmadinejad’s blatant rigged election in Iran. Indeed, the same week he announced his refusal to recognize the elections in Honduras, he gave Ahmadinejad a warm welcoming in Brasilia.

Some had hoped that due to its size and recent assertiveness in world affairs, Brazil could play a constructive role in Latin American affairs. It’s quite clear that this won’t happen under Lula’s watch.

A Venezuelan court has prohibited Guillermo Zuloaga, president of Globovision Television, from traveling to Washington, D.C. where he was scheduled to deliver an address tomorrow at the Cato Institute. Zuloaga and his network have been openly critical of the Hugo Chavez government, and as a result have endured harassment from authorities as Chavez attempts to place television and radio networks under government control or shutter them completely.

As a result, the Cato forum will now feature the vice-president of Globovision TV, Carlos Alberto Zuloaga, and Rafael Alfonzo, president of CEDICE, Venezuela’s leading market-liberal think tank, with comment by Robert Rivard, of the Inter American Press Association. Mr. Alfonzo will discuss how CEDICE and other members of civil society are coming under increasingly serious government harassment for expressing views critical of the government.

A serious institutional crisis is taking place in Honduras as a result of President Manuel Zelaya’s call for a new constitution that would allow for his reelection. Zelaya, a close ally of Hugo Chávez, is barred from pursuing a second term in the general elections in November.

Unfortunately for Zelaya, he doesn’t have the backing of his own party, much less any other major political group. So he has moved unilaterally to call for a referendum on the need for a new constitution. The vote, which is scheduled for this Sunday, has been declared illegal by the Supreme Court and the Electoral Tribunal, and condemned by the Honduran Congress and attorney general (whose office is not part of the cabinet in Honduras).

Despite the widespread institutional opposition to his plans, Zelaya is pushing for the vote. On Wednesday he ordered the Honduran armed forces to start distributing the ballots and other electoral materials throughout the country. The army chief, complying with the Supreme Court ruling, refused to obey the order. Zelaya sacked him, which prompted the resignation of all other leading army officers and the defense minister.

The attorney general is asking Congress to impeach Zelaya for violating the institutional order and abusing his powers. Last night, the Congress discussed removing Zelaya from his office. The president is defiant and has accused the Congress of attempting a coup.

In the meantime, thousands of Zelaya’s supporters are taking to the streets. Yesterday, a mob personally led by Zelaya stormed a Honduran air force base in order to retrieve the electoral materials that the generals refused to distribute. The army is reportedly deploying troops in the capital Tegucigalpa to prevent possible riots.

Zelaya’s mentor, Hugo Chávez, is not staying out of the row. Last night he warned that Venezuela and its allies won’t sit idle while the Honduran “elites” launch a coup d’etat against Zeleya. He threatened to do “whatever it takes” to defend him. It might be more hot air coming from Venezuela’s strongman, but it certainly raises the spectrum of foreign involvement in what constitutes a domestic Honduran crisis.

In an interesting twist, Zelaya has asked the Organization of American States (OAS) to intervene and defend Honduras’ democratic institutions. Most countries in the OAS are client-states of Chávez’s oil largesse. This is why the organization has repeatedly failed to condemn the abuses that Chávez and his Bolivarian friends in Ecuador, Bolivia and Nicaragua have committed against democratic institutions, independent media, the opposition, and so on. More recently, the general assembly of the OAS has lifted the membership suspension imposed on Cuba, despite the country’s blatant violation of the democratic charter of the organization.

So it wouldn’t be surprising for the OAS to come to Zelaya’s rescue with a statement in his favor, despite his efforts to subvert Honduras’ democratic institutions. Mimicking Chávez’s words, the OAS envoy to Honduras has already said that the organization won’t recognize any government that comes out of “a coup.” José Miguel Insulza, the OAS secretary general, gave a confusing and ambiguous statement regarding the sacking of the army chief, saying that “the Armed Forces should obey the constitutional mandate and the constituted authority.” It sounds more like an endorsement of Zelaya’s position. The OAS general assembly is meeting today to discuss the crisis.

It’s clear that Zelaya is deliberately generating an institutional crisis. He can rely on the support of Chávez and his regional allies in the OAS. And he knows that if the armed forces try to remove him, it would look like a “coup d’etat” that would probably be widely condemned all throughout Latin America.

This is a real test for the OAS and its supposed (and tarnished) commitment to democratic republican principles.

“We don’t want Venezuela to become a totalitarian communist state,” declared Peruvian novelist Mario Vargas Llosa yesterday in Caracas at the opening of a major conference organized by the market-liberal think tank, CEDICE. I’m in Venezuela this week with my Cato colleagues Juan Carlos Hidalgo and Gabriela Calderon to participate in the event and to run a seminar for 60 students and young leaders from Venezuela, which took place earlier this week.

Vargas Llosa’s concern is not about some remote possibility. Nor is it the opinion of an isolated intellectual detached from reality. His comments received sustained applause from the over-flow crowd of the 600 people in attendance and he has been mobbed by the press since he arrived here yesterday. Venezuela is not yet a full fledged dictatorship, evidenced by the fact that we are meeting here with leading liberal intellectuals from the region. But the environment of intolerance, arbitrary rule, and state vilification of anybody who disagrees with Hugo Chavez’s march toward socialism has worsened at an alarming rate in recent months.

Already, Chavez has centralized economic and political control to a degree unmatched anywhere in the hemisphere outside of Cuba. He controls the legislature, the supreme court, the military, the central bank, the national electoral council, much of the media, the state oil monopoly and thus virtually all government spending, and exerts tremendous influence over the private sector through regulatory measures, most especially capital controls.

Freedom of speech is coming under renewed attack. Wednesday was the two-year anniversary of the government’s decision to shut down the independent RCTV (by refusing to renew its license)—until then the country’s largest television station. It was the closing of RCTV that sparked mass protests led by the Venezuelan student movement that culminated in the defeat in December 2007 of Chavez’s proposed constitutional referendum that would have turned the country into a socialist state. Since then, the opposition has won major victories in leading cities and states and Chavez has had to deal with the steep drop in the price of oil, the source of his astronomical spending. Chavez´s response has included the marginalization of elected opposition politicians by depriving them of most of their funding and appointing parallel officials to carry out local government functions with full funding; the imposition by law of many of the measures rejected in the constitutional referendum; a rash of further nationalizations and land confiscations; and threats to close Globovision TV, the only remaining independent television station in the country.

The extent and technological sophistication of state propaganda here is impressive and chilling. Numerous state television stations operate 24 hours a day, relying on a diversity of formats (talk shows, music videos, interviews, “news” programs, congressional “debates,” etc.), praising the Chavez regime, and attacking the private sector. The programming is not just pro-government. It is explicitly Marxist through and through. There is endless talk about the effort to create a “new socialist man.” Those of us who have come to defend basic freedom in Venezuela have been individually and institutionally labeled on state television as imperialists and agents of the CIA. Currently and ironically, there is a government campaign against the “hegemony” of the private press and “media terrorism”—otherwise known in civilized countries as freedom of the press. The state intellectuals are discussing the lack of social responsibility of the private press and one channel carries congressional debates on the subject. The other day the government raided the house of the president of Globovision and accused him of violating the law in business dealings unrelated to the television station. This is being used as further proof of the existence of a vast “mafia” led by the “oligarchy.” Last night Mario Silva, the Goebbels of Venezuela, openly called on his television show for the closing of Globovision on the grounds that the station has misled and insulted the Venezuelan people for far too long and that enough is enough. I could go on but you get the picture. And this is only TV. The government finances marches, concerts and rallies, and pro-Chavez party propaganda on billboards, government buildings, public squares, etc. throughout the city and the country.

As was posted earlier, we co-sponsored a three-day Cato seminar on classical liberal thought for 60 Venezuelan students earlier this week with CEDICE that the national guard, an education ministry official and state TV interrupted in an effort to shut the event down. Their reasons for doing so were ludicrous—they accused us of setting up a university without permission. When we explained that it was a seminar that only uses the name university in the title, they then said we were engaging in false advertising and thus were still breaking the law. Fortunately, we had immediately called Globovision who immediately began reporting the incident as it occurred. I think Globovision’s role played no small part in pressuring government officials to leave. The government tried to intimidate us and provoke us into reacting aggressively, which we did not do. (Ironically, my Argentinean colleague, Professor Martin Krause, was giving a lecture at our seminar on the importance of civil society at the time of the government’s harassment.) For weeks, state media had been reporting that we were setting up a camp to train young Venezuelans in subversive tactics to overthrow the Chavez regime. This has then been discussed at length on state television by commentators, intellectuals, etc. Later I watched on Mario Silva’s program how they covered the incident showing footage that supposedly showed how we were openly flouting Venezuelan law in a number of ways. Later the same day, the authorities detained Peruvian intellectual Alvaro Vargas Llosa for three hours upon his arrival at the airport as he was headed to the Cato-CEDICE seminar, finally letting him go and informing him that he could not discuss political issues. Here again Globovision played a key role. It began reporting the events at airport as they happened, which were in turn immediately reported throughout the Latin American press.

This is an increasingly polarized and tense society. But it is also true that Chavez must rely extensively on force and deception to promote his socialist project. His personal popularity has sunk under 50 percent in recent weeks (support for his policies are even lower) and he is becoming more radical. The CEDICE conference has been filled with especially inspiring and moving speeches, particularly from the Venezuelans. Some of them–like RCTV president Marcel Granier or Oscar Garcia Mendoza, president of a leading bank that has never done business with government—are heroes of freedom, putting their own fortunes and personal liberty at risk in openly challenging the regime. They have the admiration of all freedom lovers here. They deserve all the support they can get in a battle that is only going to get tougher.

The Cato Institute media department sent this press release to media outlets in Latin America, after the Venezuelan government tried to shut down a Cato-sponsored conference this week:

CAUCAGUA, VENEZUELA—A Cato Institute educational seminar fell victim to an attempt by the Venezuelan government to shut it down for expressing ideas critical of the Chavez regime.

Numerous Venezuelan government agencies harassed the Cato Institute event, called Universidad El Cato-CEDICE, or “Cato University,” which took place in Caucagua, Venezuela May 24-26. The event is co-sponsored by the Venezuelan free-market think tank Centro de Divulgación del Conocimiento Económico por la Libertad (CEDICE) and was organized to teach and promote the classical liberal principles of limited government, individual liberty, free markets and peace.

During the course of the event on Monday, the National Guard, state television and a state representative from a ministry of higher education interrupted the seminar, demanding that the seminar be shut down on the grounds that the event organizers did not have permission to establish a university in Venezuela. When the authorities were told that neither Cato nor CEDICE was establishing a university and that the Cato Institute has long sponsored student seminars called Cato Universities, the authorities then insisted that the seminar was in violation of Venezuelan law for false advertising.

After two hours of groundless accusations, the Chavez representatives left but their harassment has continued. One of the speakers at the seminar, Peruvian intellectual Alvaro Vargas Llosa, was detained by airport authorities Monday afternoon for three hours for no apparent reason. He was released and told that he could stay in the country as long as he did not express political opinions in Venezuela.

“The government’s attacks on freedom of speech are part of a worrying pattern of abuse of power in Hugo Chavez’s Venezuela,” said Ian Vasquez, director of Cato’s Center for Global Liberty and Prosperity, from Caucagua. “But they have so far not managed to alter the plans of the Cato Institute here, and will hopefully not do so, as we continue to participate in further meetings the rest of this week.”

For more information about Cato programs in Latin America, visit www.ElCato.org.

UPDATE (5/27, 2:30 PM EST) : Cato just received word from scholar Ian Vásquez that “Chavistas are gathering in front of the conference hotel now…Cato is all over state TV.”

Vásquez snapped this photo of people carrying anti-Cato signs and protesting the conference.